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FAAC Payout Drops by N90b in October

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Federation Account Allocation Committee
  • FAAC Payout Drops by N90b in October

Total payout by the Federation Account Allocation Committee (FAAC) to the three tiers of government decreased by N90 billion in October, from N420 billion in September, FBNQuest has said.

In a report, FBN Quest, the investment and research arm of FBN Holdings, said crude oil price crash hit the FAAC cash, leading to the drop in the allocation and the inability of many states to honour recurrent obligations, including salaries and pension liabilities, as well as capital obligations.

FBNQuest said the statutory distribution of N251 billion was supplemented by excess petroleum tax payments of N63 billion, an exchange-rate gain of N41 billion, the regular Nigeria National Petroleum Corporation (NNPC) refund of N6 billion and an undisclosed amount from Value Added Tax (VAT).

The report titled: ‘A marked decline in the FAAC payout’, said the figure fell below the forecast pro rata monthly average of N477 billion in the 2016 budget, which projects the net distribution from the Federation Account and the VAT pool combined at N5.72 trillion, for the first time in four months.

It said the three previous distributions were boosted by the impact of the Central Bank of Nigeria (CBN) ‘devaluation’ on June 20, adding that both petroleum receipts based on the US dollar price and customs revenues benefited from the adjustment.

The Central Bank of Nigeria (CBN) had abandoned a 16-month currency peg on June 20 and adopted flexible foreign exchange policy, which gave the naira greater flexibility to adjust against the dollar. The ‘devaluation’ of the naira was meant to provide the much-desired stimulus and foreign portfolio investment needed to boost investments in the capital market.

The drop in FACC revenues was also caused by the state of force majeure at the Bonny terminal and the subsisting force majeure at the Forcados terminal as well as the drop in non-mineral revenue in September.

However, the Excess Crude Account (ECA) balance stood at $2.45 billion and compromised part of official reserves, which amounted to $23.91 billion as at October 21.

Analysts insist the oil price crisis resulted from drastic, adverse structural shift in the global market demand and supply of oil and gas. International market price of oil dropped by about 43 per cent from an average of about $100.35 for the 12 months of 2014 to an average of $57.20 for the first six months of last year and closed at $51 on Monday.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Banking Sector

Access Holdings Plc Plans $1.8 Billion Capital Raise

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Access bank

Access Holdings Plc, the parent company of Nigeria’s leading bank, Access Bank Plc, has unveiled ambitious plans for a $1.8 billion capital raise aimed at fueling its expansion efforts over the next four years.

The strategic move comes as Access sets its sights on becoming one of the largest lenders on the African continent.

During a conference call with investors in Lagos, executives outlined the company’s intention to raise $1.5 billion, or the naira equivalent, through the issuance of shares, bonds, or other financial instruments.

Also, Access aims to generate up to 365 billion naira ($257 million) by selling shares to existing investors.

Bolaji Agbede, acting group chief executive officer, clarified that the current fundraising initiative primarily involves a rights issue.

The capital infusion is earmarked to support Access’s ambitious growth plan, which commenced last year.

The bank intends to expand its footprint into new markets, including Morocco, Egypt, and the United States, as part of a broader strategy to double the share of assets outside its home market by 2027.

With operations spanning 22 countries, including the United Arab Emirates and the UK, Access Bank is positioning itself for significant international growth.

The recent appointment of Bolaji Agbede as acting group CEO follows the passing of co-founder and former CEO, Herbert Wigwe, adding a layer of significance to the bank’s future direction.

Access’s acquisition of National Bank of Kenya Ltd. underscores its commitment to expanding its presence in East Africa’s largest economy.

As Access Bank charts its course for expansion, the $1.8 billion capital raise signals its determination to seize opportunities in a rapidly evolving financial landscape, both domestically and across the African continent.

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Finance

OPEC+ Production Cuts and Geopolitical Tensions Propel Oil Price to Over $87

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Crude oil - Investors King

Oil price surged past the $87 price level on Thursday on the back of production cuts by OPEC+ nations and escalating geopolitical tensions.

Brent crude oil, against which Nigerian oil is priced, rose by $1.39 or 1.6% to $87.48 a barrel, its highest level since October 27.

OPEC+, the alliance of major oil-producing nations, has remained resolute in its commitment to curtail output, effectively tightening the supply of crude in the market.

Despite calls for increased production to alleviate soaring prices, the alliance has opted to maintain its course, further buoying the market sentiment.

Simultaneously, geopolitical tensions have added fuel to the fire. Attacks on Russia’s energy infrastructure, particularly by Ukraine, have sparked concerns over potential disruptions to the global oil supply chain.

Despite diplomatic efforts to deter such actions, the situation remains precarious, contributing to market anxieties.

Analysts suggest that these price surges may have long-term implications for global economies, particularly for oil-importing nations heavily reliant on stable energy prices.

Furthermore, the impact of rising oil prices on inflation and consumer spending patterns remains a point of contention among economists and policymakers.

As the world watches with bated breath, the trajectory of oil prices hinges on a delicate balance between geopolitical developments, OPEC+ policies, and the broader economic landscape.

For now, the $87 threshold serves as a stark reminder of the volatility and interconnectedness inherent in the global energy markets.

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Insurance

Heirs Insurance Group Unveils Revolutionary Website for Seamless Insurance Experience

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Heirs Life Assurance- Investors King

Heirs Insurance Group has launched a website designed to revolutionize the insurance experience for its customers.

With a focus on simplicity, accessibility, and personalized service, the new website aims to streamline the process of obtaining insurance coverage and empower customers to make informed decisions about their insurance needs.

The website boasts a range of innovative features that make navigating insurance options easier than ever before.

From simple and intuitive navigation menus to personalized insurance recommendations, the website is designed to guide customers through every step of the insurance process quickly and efficiently.

According to Ifesinachi Okpagu, the Chief Marketing Officer of Heirs Insurance Group, the new website embodies the company’s commitment to delivering exceptional customer service.

“Today’s customers want simplicity, and this new website delivers on that request,” Okpagu said. “We are empowering customers to take control of their lives, their businesses, assets, and their most cherished people.”

One of the key features of the website is its personalized insurance experience, which takes customers through a short journey to help them identify the best insurance plan for their needs.

Whether customers are looking for coverage for their home, car, business, or loved ones, the website provides tailored recommendations to ensure they find the right insurance solution quickly and easily.

With its user-friendly interface and innovative features, the new website from Heirs Insurance Group sets a new standard for the insurance industry, making it easier than ever for customers to protect what matters most to them.

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